AM Best Affirms Credit Ratings of Fidelidade Moçambique – Companhia de Seguros, S.A.

LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb” (Fair) of Fidelidade Moçambique – Companhia de Seguros, S.A. (Fid Moz) (Mozambique). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Fid Moz’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management. In addition, the ratings factor in rating enhancement from Fid Moz’s intermediate insurance company parent, Fidelidade - Companhia de Seguros, S.A., reflecting the integration of Fid Moz with its parent and the reinsurance support received from the group’s internal reinsurance vehicle, Fidelidade Re – Companhia de Resseguros, S.A. (Fidelidade Re).

Fid Moz’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which was at the strongest level at year-end 2024. Fid Moz’s balance sheet strength is supported by good liquidity and prudent reserving practices. Offsetting rating factors include the very high economic, political and financial system risks in Mozambique, where Fid Moz is domiciled and holds all of its invested assets. In addition, Fid Moz has a moderate dependence on reinsurance to manage its catastrophe exposed lines of business, although the associated credit risk is managed through the use of a reinsurance panel of good credit quality, which includes Fidelidade Re’s participation.

Fid Moz has a track-record of solid operating performance, illustrated by a five-year (2020-2024) weighted average return-on-equity and combined ratios of 14.2% and 87.3%, respectively. However, results in recent years are being pressured by competitive market conditions and natural catastrophe events, which have led to a weakened combined ratio of 95.9% in 2024. In addition, the inclusion of health business since 2022 has contributed to higher combined ratios, given that this book runs at a higher loss ratio and has been negatively impacted by claims inflation in recent years. Investment performance remains a strong contributor toward Fid Moz’s overall earnings, supported by the favourable interest rate environment in Mozambique; however, the company’s profits have become increasingly reliant on investment results, which comprised over 70% of profit before tax in 2024.

Fid Moz maintains a solid competitive position in its domestic market, as the second-largest insurer in terms of 2024 gross written premium. The company has a well-diversified underwriting portfolio by line of business, though operates exclusively in Mozambique, which is a relatively small market by global standards and is subject to elevated country risk.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.